Samsung US strategy exec wavers on stand in Apple trial

updated 03:35 am EDT, Mon August 6, 2012

by MacNN Staff

Shown documents of Samsung studying Apple products

Apple's fourth witness in the California-based Apple vs. Samsung trial was a Samsung employee, Samsung's US Chief Strategy Officer Justin Denison, who was questioned about some Samsung documents as well as a deposition he gave in 2011. Apple's attorneys tried, with mixed success, to use Denison to paint Samsung as openly copying Apple, and at two points got him to admit he could not stand by some of his earlier testimony.

Denison was on the stand representing three branches of the South Korean electronics giant: the parent company Samsung Electronics Corporation (SEC), Samsung Electronics America (SEA) and Samsung Telecommunications America (STA). After clarifying the three branches, Apple counsel William Lee asked Denison if he was under an obligation to take an instruction that came from the head offices of those divisions, or the parent company. Denison answered that communications were usually a "conversation" that involved a lot of back-and-forth but could be interpreted as directives.

Apple's attorney asked Denison a series of questions about a deposition given in 2011 on the topic of Samsung copying from Apple. In the video deposition, Denison said that he talked to Samsung designers (some of which spoke Korean and thus were interpreted) and that they told him they hand not considered, studied, drawn or copied anything from Apple's product designs. The Apple attorney went out of his way to add that in the context of these conversations, benchmarking should be considered different from copying, a point to which Denison agreed.

Following the playing of the deposition in which Denison claimed Samsung didn't copy anything, Lee asked Denison if he still stood by that testimony as it related to the products contested in this case. Denison, over the objection of Samsung's lawyers, said no, but then waffled on the answer a bit. Samsung's request for a sidebar with the judge at that point was denied.

Apple's attorney Lee then introduced an internal Samsung presentation called "Beat Apple Response" which was dated March 25, 2011 -- the same day the iPad 2 was introduced. Denison said that he created the presentation at the direction of Samsung's CEO, Bill Choi. Included in the presentation are notes from another presentation Samsung gave in November 2010 called "Why [Samsung] should care about Apple." Lee points out another section of the presentation, which dealt with strategy to compete against the iPhone at the time and had a "Recent Apple Analysis projects" page.

Lee also showed portions of a later (2012) Denison presentation entitled "Three Horse Race Becoming a Two-Horse Race between Apple and Samsung" to establish that in fact Samsung had been carefully studying Apple, in contradiction to Denison's deposition testimony. He was shown another presentation called "Relative Evaluation Report on [Samsung's Galaxy smartphone, known internally as S1] and iPhone" that was dated March 2, 2010. The report showed a comparison of the iPhone's ability to zoom in on web items with a double-tap and recommended that the Galaxy's double-tap zoom needed to be improved.

Other pages of the same presentation showed direct comparison of the iPhone and the Galaxy phone in a number of areas, including the UI and menu icons, each with directions for improvement to the Samsung phone. Denison was again asked at this point if he stood behind his November 2011 deposition, but Denison dodged the question by saying the models being discussed in the presentations and in the case now aren't the same ones he was asked to comment on in that deposition. Judge Lucy Koh noted that she disagreed with Samsung on Denison's ability to speak more broadly on the topic of "copying."

Following a break, Samsung lawyers also quizzed Denison, asking him to clarify which models of phone he was speaking of in the 2011 deposition. In response, he mentioned the Galaxy Tab, the Droid Charge, the Galaxy S and the Infuse4G. Denison was asked if recommendations of the kind seen previously were made when comparing the iPhone and the Samsung Galaxy S, and he said he was not aware of any.

Samsung's attorney handed Denison an iPhone and an Infuse4G and asked him to describe how they are different. Apple objected to this, however, so Denison simply described the Infuse4G while the two phones were handed around to the jury. The judge shortly afterwards prevented Denison from describing what the Infuse4G designers had been going for, since the designers themselves would be testifying later. The Galaxy S smartphone and the Galaxy 4G were also introduced and shown to the jury.

Samsung's attorney asked Denison why the Samsung models have rounded corners (like the original iPhone and subsequent models). He replied that rounded corners fit better in one's hand, and slide into pockets more easily. He added that the design is a durability issue -- if one drops a phone with a sharp edge, it is more likely to break. He was also asked about why phones have rectangular screens, black masks around the screen, and why the screen in centered, with simple explanations that painted each as a logical, inevitable option (even though Samsung itself has occasionally abandoned these concepts, for example producing phones with sharp corners and curved glass).

When asked if Samsung wants to beat Apple, Denison said that the company wanted to sell more products, but when asked if Samsung only wanted to beat Apple, he said that Samsung "monitor[s] all competition" in the market -- despite having authored a presentation that said that the smartphone market was essentially down to just Samsung and Apple.

Denison described Samsung's strategy for dominance as being different from Apple's, in that the company wanted to deliver "multiple products at multiple price points" unlike the strategy Apple had pursued for most of the iPhone's product cycle. He added that copying, in his view, did not create a sustainable advantage.

He pointed out that Apple introduces roughly one new model every year and is still primarily identified with one carrier in most markets. Samsung, he said, introduced 50 models in 2011, offering different carriers different feature sets and different price points. Like Apple, Denison said STA (the US branch of the company) spent about $1 billion in marketing.

He estimated that the parent company had spent about $35 billion over the last few years on research and development, and said there are around 50,000 engineers and upwards of 1,200 designers at Samsung. He added that Samsung has been the second most-awarded patent creator since at least 2008, and mentioned that the company was the first with a camera phone, and pushed technology such as Super AMOLED displays.

Asked if he thought consumers bought phones as an "impulse" decision, he offered the oddly specific statistic (not sourced, but presumably from Samsung's own research) that customers take six weeks to decide which smartphone to buy. Denison was asked if he'd heard of any examples of people buying Samsung phones thinking they were iPhones, and he said no.

The last report exhibited was one by Denison that came out last year entitled "iPhone 5 counter strategy" but he pointed out that as Apple surprised the industry by not coming out with an iPhone 5, the information in the document was likely to be inaccurate. Denison is expected to re-take the stand later today at noon eastern time.

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Apple's fourth witness in the California-based Apple vs. Samsung trial was a Samsung employee, Samsung's US Chief Strategy Officer Justin Denison, who was questioned about some Samsung documents as well as a deposition he gave in 2011. Apple's attorneys tried, with mixed success, to use Denison to paint Samsung as openly copying Apple, and at two points got him to admit he could not stand by some of his earlier testimony.

Denison was on the stand representing three branches of the South Korean electronics giant: the parent company Samsung Electronics Corporation (SEC), Samsung Electronics America (SEA) and Samsung Telecommunications America (STA). After clarifying the three branches, Apple counsel William Lee asked Denison if he was under an obligation to take an instruction that came from the head offices of those divisions, or the parent company. Denison answered that communications were usually a "conversation" that involved a lot of back-and-forth but could be interpreted as directives.
Apple's attorney asked Denison a series of questions about a deposition given in 2011 on the topic of Samsung copying from Apple. In the video deposition, Denison said that he talked to Samsung designers (some of which spoke Korean and thus were interpreted) and that they told him they hand not considered, studied, drawn or copied anything from Apple's product designs. The Apple attorney went out of his way to add that in the context of these conversations, benchmarking should be considered different from copying, a point to which Denison agreed.
Following the playing of the deposition in which Denison claimed Samsung didn't copy anything, Lee asked Denison if he still stood by that testimony as it related to the products contested in this case. Denison, over the objection of Samsung's lawyers, said no, but then waffled on the answer a bit. Samsung's request for a sidebar with the judge at that point was denied.
Apple's attorney Lee then introduced an internal Samsung presentation called "Beat Apple Response" which was dated March 25, 2011 -- the same day the iPad 2 was introduced. Denison said that he created the presentation at the direction of Samsung's CEO, Bill Choi. Included in the presentation are notes from another presentation Samsung gave in November 2010 called "Why [Samsung] should care about Apple." Lee points out another section of the presentation, which dealt with strategy to compete against the iPhone at the time and had a "Recent Apple Analysis projects" page.
Lee also showed portions of a later (2012) Denison presentation entitled "Three Horse Race Becoming a Two-Horse Race between Apple and Samsung" to establish that in fact Samsung had been carefully studying Apple, in contradiction to Denison's deposition testimony. He was shown another presentation called "Relative Evaluation Report on [Samsung's Galaxy smartphone, known internally as S1] and iPhone" that was dated March 2, 2010. The report showed a comparison of the iPhone's ability to zoom in on web items with a double-tap and recommended that the Galaxy's double-tap zoom needed to be improved.
Other pages of the same presentation showed direct comparison of the iPhone and the Galaxy phone in a number of areas, including the UI and menu icons, each with directions for improvement to the Samsung phone. Denison was again asked at this point if he stood behind his November 2011 deposition, but Denison dodged the question by saying the models being discussed in the presentations and in the case now aren't the same ones he was asked to comment on in that deposition. Judge Lucy Koh noted that she disagreed with Samsung on Denison's ability to speak more broadly on the topic of "copying."
Following a break, Samsung lawyers also quizzed Denison, asking him to clarify which models of phone he was speaking of in the 2011 deposition. In response, he mentioned the Galaxy Tab, the Droid Charge, the Galaxy S and the Infuse4G. Denison was asked if recommendations of the kind seen previously were made when comparing the iPhone and the Samsung Galaxy S, and he said he was not aware of any.
Samsung's attorney handed Denison an iPhone and an Infuse4G and asked him to describe how they are different. Apple objected to this, however, so Denison simply described the Infuse4G while the two phones were handed around to the jury. The judge shortly afterwards prevented Denison from describing what the Infuse4G designers had been going for, since the designers themselves would be testifying later. The Galaxy S smartphone and the Galaxy 4G were also introduced and shown to the jury.
Samsung's attorney asked Denison why the Samsung models have rounded corners (like the original iPhone and subsequent models). He replied that rounded corners fit better in one's hand, and slide into pockets more easily. He added that the design is a durability issue -- if one drops a phone with a sharp edge, it is more likely to break. He was also asked about why phones have rectangular screens, black masks around the screen, and why the screen in centered, with simple explanations that painted each as a logical, inevitable option (even though Samsung itself has occasionally abandoned these concepts, for example producing phones with sharp corners and curved glass).
When asked if Samsung wants to beat Apple, Denison said that the company wanted to sell more products, but when asked if Samsung only wanted to beat Apple, he said that Samsung "monitor[s] all competition" in the market -- despite having authored a presentation that said that the smartphone market was essentially down to just Samsung and Apple.
Denison described Samsung's strategy for dominance as being different from Apple's, in that the company wanted to deliver "multiple products at multiple price points" unlike the strategy Apple had pursued for most of the iPhone's product cycle. He added that copying, in his view, did not create a sustainable advantage.
He pointed out that Apple introduces roughly one new model every year and is still primarily identified with one carrier in most markets. Samsung, he said, introduced 50 models in 2011, offering different carriers different feature sets and different price points. Like Apple, Denison said STA (the US branch of the company) spent about $1 billion in marketing.
He estimated that the parent company had spent about $35 billion over the last few years on research and development, and said there are around 50,000 engineers and upwards of 1,200 designers at Samsung. He added that Samsung has been the second most-awarded patent creator since at least 2008, and mentioned that the company was the first with a camera phone, and pushed technology such as Super AMOLED displays.
Asked if he thought consumers bought phones as an "impulse" decision, he offered the oddly specific statistic (not sourced, but presumably from Samsung's own research) that customers take six weeks to decide which smartphone to buy. Denison was asked if he'd heard of any examples of people buying Samsung phones thinking they were iPhones, and he said no.
The last report exhibited was one by Denison that came out last year entitled "iPhone 5 counter strategy" but he pointed out that as Apple surprised the industry by not coming out with an iPhone 5, the information in the document was likely to be inaccurate. Denison is expected to re-take the stand later today at noon eastern time.

First off why the strike through?

Second, I find this absurd that Apple is so stupid and arrogant that they think they invented a rounded rectangle phone:

"Samsung's attorney asked Denison why the Samsung models have rounded corners (like the original iPhone and subsequent models). He replied that rounded corners fit better in one's hand, and slide into pockets more easily. He added that the design is a durability issue -- if one drops a phone with a sharp edge, it is more likely to break. He was also asked about why phones have rectangular screens, black masks around the screen, and why the screen in centered, with simple explanations that painted each as a logical, inevitable option (even though Samsung itself has occasionally abandoned these concepts, for example producing phones with sharp corners and curved glass)."

What about studying the competition? I mean, imagine studying your competitors! Who does that anyway!

I like the part about Samsung being one of the first to offer a camera phone. Should Samsung sue Apple for making a camera phone?

"Asked why Apple puts cameras on its phone, it said that customers don't like carrying two devices. And that because they made the camera phone magical, they should have a monopoly on it. Forget the people who originated and invented this stuff years ago."

Apple is trying to imply that Samsung switched to rounded corners after they saw it on the iPhone. Its not a patent dispute, the problem here isn't that Samsung used rounded corners on a phone, its that they saw them on the iPhone and included them on the Galaxy to make it more like the iPhone. Once again, difficult to prove, but probably true. Legally speaking, without testimony from someone who was at Samsung or a leaked email or memo saying "The CEO told us to put rounded corners on it to make it look like an iPhone", Apple would never win that specific case.

These design disputes do not require that sort of hard evidence since only an idiot would leave a trail like that when stealing a design. Requiring such evidence would encourage industrial espionage and criminal behaviour. Apple is hoping to pile up enough 'soft' evidence to convince a jury they are in the right. It will be a laundry list of these smaller details that aren't protected by patents, combined with the timings of the decisions to include or change to these iPhone-like features, plus whatever they can find that implies Samsung feared/envied/admired Apple products and deliberately targeted Apple and Apple customers.

Apple is trying to imply that Samsung switched to rounded corners after they saw it on the iPhone. Its not a patent dispute, the problem here isn't that Samsung used rounded corners on a phone, its that they saw them on the iPhone and included them on the Galaxy to make it more like the iPhone. Once again, difficult to prove, but probably true. Legally speaking, without testimony from someone who was at Samsung or a leaked email or memo saying "The CEO told us to put rounded corners on it to make it look like an iPhone", Apple would never win that specific case.
These design disputes do not require that sort of hard evidence since only an idiot would leave a trail like that when stealing a design. Requiring such evidence would encourage industrial espionage and criminal behaviour. Apple is hoping to pile up enough 'soft' evidence to convince a jury they are in the right. It will be a laundry list of these smaller details that aren't protected by patents, combined with the timings of the decisions to include or change to these iPhone-like features, plus whatever they can find that implies Samsung feared/envied/admired Apple products and deliberately targeted Apple and Apple customers.

I agree with most of this. The problem I see though is that if for some reason Apple got a judgement in its favor, on appeal the higher courts would rip this up. The reason is that many of the design related "dress" that Apple is claiming Samsung copied... Apple has no ownership over.

In other words, they were NOT the first with these designs. Should XDA sue Apple over "a smartphone with rounded corners"? Should Samsung sue Apple for putting a camera on a phone, some them and Sony pretty much invented years before the iPhone?

It becomes totally absurd, and so is the evidence Apple is presenting. Look there, Emails at Samsung talking about how they have to beat the iPhone! Wow! How incriminating!

Meanwhile, the rest of the world does this. Apple even codenamed early iPhone prototypes N95 after Nokia's phone. They even looked at competitors' phones in the iPhone Keynote and showed pictures comparing theirs to... the other guys.

I mean please. Last week I audited Apple Pages because we make a competing application. I traced moused movements and counted the number of clicks to achieve x on things. So our program would be more efficient at certain things. Should Apple sue me?

Sorry but this trial is ridiculous. The only hope in hell Apple has is if, as you have alluded to, the Galaxy S looks so much like the iPhone that it confused consumers. That Apple has to demonstrate this. And this MUST be because... Mostly because of hardware because confusion over ANDROID is far too easily being confounded with Samsung. And Android belongs to Google.

In other words and in my view, the Galaxy S doesn't look enough like the iPhone that I get confused. That even if some design elements were picked up by Samsung, the look of the device is as much defined by the hardware as it is the software. And there's lots of rounded rectangle phones out there with a grid of icons... Apple should go after Google...

If this trial were about consumer confusion regarding the iPhone and Samsung's knock-off phones, Apple would likely lose -- luckily, this trial isn't about that (it would have been the nail in the coffin, but it's not what Apple has to prove to win). All Apple has to do here is establish that Samsung took a sharp left turn from their previous designs when the iPhone came out.

If there comes a trial that's just about the deliberate confusion of the Galaxy Tab and the iPad, Apple's already won that one twice over and would win it in the US. Much more blatant there.

If this trial were about consumer confusion regarding the iPhone and Samsung's knock-off phones, Apple would likely lose -- luckily, this trial isn't about that (it would have been the nail in the coffin, but it's not what Apple has to prove to win). All Apple has to do here is establish that Samsung took a sharp left turn from their previous designs when the iPhone came out.
If there comes a trial that's just about the deliberate confusion of the Galaxy Tab and the iPad, Apple's already won that one twice over and would win it in the US. Much more blatant there.

You don't get it. This is focused on design. Susan Kare icon designer is even taking the stand. Apple has to demonstrate much more than Samsung taking a "left turn". You seem to oversimplify the case. Apple has to go all the way to showing they've been financially harmed by Samsung "copying" their iPhone in design. And even if they can show they lost marketshare to Samsung, it implies ZERO wrongdoing by Samsung. Anyone can make a widget and soak up marketshare from competitors, doesn't mean you did anything wrong.

But here's the big, big problem for Apple that you keep missing: even if they have Emails from Samsung saying to copy design elements of the iPhone, where will this get you? Unless you can demonstrate confusion in the market, it won't get you anywhere here because the design elements that Apple is accusing Samsung of copying are NOT OWNED BY APPLE, like the rounded rectangle. So anyone can use these design elements with impunity because there is no ownership over them. They have been widely used for years well before Apple came around.

So the point is that Apple must take the sum total of these "soft" things and demonstrate that the Galaxy S looks too much like the iPhone that it causes confusion. Then they have to demonstrate why their dollar figure of dmages is rational.

Let me illistrate this way: you can go a make a car with wheels, a steering wheel, headlights, cruise control... And not pay a cent in licensing fees or be litigated against because none of these things are owned by anybody. But if you make a car that looks so much like a competitors then you may face a lawsuit. The prosecution MUST demonstrate a lot of confusion in the market or else they won't have a case.

Unless you can demonstrate confusion in the market, it won't get you anywhere here because the design elements that Apple is accusing Samsung of copying are NOT OWNED BY APPLE, like the rounded rectangle. So anyone can use these design elements with impunity because there is no ownership over them. They have been widely used for years well before Apple came around.

How does ownership or lack thereof relate to confusion in the marketplace?

Originally Posted by freudling

So the point is that Apple must take the sum total of these "soft" things and demonstrate that the Galaxy S looks too much like the iPhone that it causes confusion.

Thats what I've been saying.

You may have noticed that cars that look most similar to other cars do so for one of two reasons. One is because they share a chassis (like cars from Audi, Skoda and Seat that were all based on the VW Golf chassis), the other is due to licensing. Daewoo made one based on the Vauxhall Astra and the Mk 2 Golf was still on sale in South Africa when I was there in 2006 under a different guise.

There is a reason that car companies don't copy each other, a reason that holds across many many different products and markets but for some reason technology companies seem to think they can get away with ignoring it.

How does ownership or lack thereof relate to confusion in the marketplace?
Thats what I've been saying.
You may have noticed that cars that look most similar to other cars do so for one of two reasons. One is because they share a chassis (like cars from Audi, Skoda and Seat that were all based on the VW Golf chassis), the other is due to licensing. Daewoo made one based on the Vauxhall Astra and the Mk 2 Golf was still on sale in South Africa when I was there in 2006 under a different guise.
There is a reason that car companies don't copy each other, a reason that holds across many many different products and markets but for some reason technology companies seem to think they can get away with ignoring it.

The point is that because you use a steering wheel, wheels, a windshield, a trunk, seat belts... a host of things invented by other people where the sum total makes your product look like a "car" doesn't mean you "copied" someone. Copying being the implication that you have incriminated yourself. That it's something you're not allowed to do, at least without paying licensing fees.

Some cars look very similar to each other. In fact so similar that if you're like me and aren't into cars, economy cars fir instance all look pretty much the same: buckets of plastic.

The point in this case is that Samsung can use rounded corners amd a rectangle all it wants because Apple doesn't own that design. If they did the whole industry would have to license that design from Apple. So you can't say Samsung "copied" Apple with a rounded rectangle phone and expect anything to happen to them. They can use that design all they want without worrying about a company like Apple stoppng them. And so can anyone else. And the reason again is simple: Apple is NOT the originator of that design and has ZERO ownership over it.

Same with icons: I don't think they'll get anywhere with saying Samsung copied their icons because gradients and shapes are NOT owned by Apple or anyone for that matter.

But as you alluded to, it's the sum total of these things that 'may' make a product so similar to another that it causes confusion in the market. The only way they're going to get anywhere is if Apple can demonstrate that there is confusion in the market: they can't get anywhere on just the design elements alone saying Samsung copied them because the elements themselves are free to be used by anyone, like a steering wheel.

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